Ford posted stable earnings late Wednesday after sales rose 7% over the first quarter but struggled to maintain profitability as moderate price cuts and electric vehicle production expenses took their toll.
The Blue Oval automaker scored a quarterly revenue of $42.8 billion across its divisions, with automotive income representing around 93% of the total. Its earnings reflect a 3% year-over-year increase, underlining the positive impact rising inventory levels have had on sales in the aftermath of the COVID-19 pandemic’s supply-strapped market. Commercial sales this year have been especially strong; Ford Pro, the brand’s fleet-focused business arm, saw its revenue grow 120% from early 2023 to $3.01 billion.
However, while revenue grew from January through March, the company’s profitability took substantial hits due to several factors. Ford reported a net income of $1.33 billion for the quarter, a decline of roughly 24% from the prior-year period. Whereas Ford Pro boosted revenue, the automaker’s other divisions, the electrification-focused Ford Model e and ICE-focused Ford Blue, served to detract, with the former recording a 66% decline in adjusted earnings and the latter suffering a $1.32 billion loss.
Opposing trends in revenue and profitability have become the norm for U.S. automakers in the post-pandemic car market. The return of inventory has placed downward pressure on vehicle prices, eating away at automaker profit margins but spurring demand among deal-starved consumers. These factors have boosted sales (and thus revenue) while constraining income, although the effect has varied heavily between brands. General Motors, for instance, saw its net profits rise 24.4% during the first quarter to hit $3 billion despite a decline in year-over-year sales, standing out from the rest of the industry.
It is important to note that Ford still retained value better than some of its competitors. Tesla, facing a unique array of challenges, reported profits of $1.13 billion for the January-through-March period, down 55% from early 2023.
Overall, Ford has defended its position in the U.S. car market admirably since the start of the year. While not necessarily achieving any remarkable breakthroughs, the company’s progress during the first quarter was, as CFO John Lawler put it during yesterday’s earnings call, “solid.”
